New York’s Met Opera redefines the core
The Metropolitan Opera in New York is a fascinating example of re-defining the core, through the launch of Live in HD: high-definition broadcasts beamed to cinemas. An article in The Times (subscription needed) told the story of how the Met's general manager, Peter Gelb, has used Live in HD to rejuvenate The Met.
1. Re-define the core
You could define the core business of The Met as simply being an opera company. However, this limits the potential for growth. In addition, there is ever more intense competition from other forms of entertainment, both live and in-home. It seems to me that The Met has re-defined its core as being about opera entertainment, with an emphasis on live performance. This broadens the opportunities for growth, including Live in HD, DVDs and streaming.
The need to rejuvenate The Met's offer is summed up by Gelb. “Just because the Met has existed for 130 years doesn’t mean it will still exist," he says, "This is a question of whether arts organisations will survive or not.” The risk of standing still is shown by the New York City Opera closing its doors last year.
2. Drive distribution
Driving distribution is one of the best ways to grow your core business. In the case of Live in HD, this involves broadcasting the performances live in cinemas, with a charge of $25 (£15) a ticket. This means that the Met can now reach a much wider audience than just people living in the New York area, with up to 200,000 people around the world now watching. This has generated a new revenue stream, with turnover of almost $35 million (£21 million) in the last financial year.
I like the way that Live in HD tries to amplify the live shows, not just be an inferior version. For example, short "magaziney" features during the intervals include interviews with the singers just after they come off the stage.
3. Invest in talent
The Met has invested in the right talent to rejuvenate its core business. Gelb himself headed Sony’s classical division before joining The Met in 2006. And the director of a recent Live in HD performance, Prince Igor, is Gary Halvorson, a director with 55 episodes of Friends to his name.
The team is also incentivised to make Live in HD a success, with singers getting a profit share if box office targets are reached.
4. Grow the core
Gelb hopes that the Live in HD broadcasts will help drive sales of seats in The Met itself. "(Gelb is) building a new audience to opera that he hopes will one day come to the Met itself," as the article says. And filling the house of almost 4,000 seats is indeed a challenge he needs to work in, with average attendances at 79% of capacity last year.
In conclusion, Live in HD from The Met is a good example of a company trying to pro-actively redefine and rejuvante its core business in the face of an evolving and increasingly competitive marketplace. Perhaps Mrs Taylor fancies a trip to the local cinema to see La Boheme?